SoFi Technologies Inc (NASDAQ:SOFI) shares are trading lower during Thursday's premarket session. The digital lender faces a combination of heavy short-seller allegations and broader market weakness.

The decline follows a turbulent week for the fintech firm. Broad market indices are also under pressure. Nasdaq futures fell 0.71% Thursday morning. S&P 500 futures shed 0.59% in tandem.

Muddy Waters Alleges' Financial Engineering'

The primary catalyst remains a report released on Tuesday from Muddy Waters Research. Led by Carson Block, the firm labeled SoFi a "financial engineering treadmill."

The report alleged that SoFi's 2025 adjusted EBITDA was inflated by 90%. Muddy Waters suggested the true figure was $103 million. This contradicts the reported $1.05 billion. Block also questioned "Enron-esque" off-balance-sheet structures.

SoFi Management Fires Back

SoFi characterized the claims as a "fundamental lack of understanding" of their business. On Wednesday, the company signaled intent to "explore potential legal action."

Management stated the report was "designed to deceive investors." They pointed to Muddy Waters' own disclosures. The firm intended to cover short positions immediately after publication. "They stand to profit from their own misleading report," SoFi added.

Rising Short Interest And Insider Moves

Bearish bets against the stock are increasing. Short interest in SoFi rose from 123.21 million to 128.39 million. This represents 10.29% of the company's public float.

Recent insider data shows mixed signals. CEO Anthony Noto bought 28,900 shares at $17.32 on March 17. However, CTO Jeremy Rishel executed a "sell-options" transaction totaling $4.48 million between March 16 and 18.

Technical Analysis

SoFi is trading 8.5% below its 20-day simple moving average (SMA) and 32.2% below its 100-day SMA, keeping the intermediate trend pointed down even as the stock tries to stabilize.

Shares are up 34.96% over the past 12 months, but the current price is positioned closer to the 52-week low ($8.60) than the 52-week high ($32.73).

RSI is at 29.38, which is oversold territory. Meanwhile, MACD is at -1.0796 versus a signal line of -1.1528.

SOFI Stock Price Activity: SoFi Technologies shares were down 2.04% at $16.83 during premarket trading on Thursday, according to Benzinga Pro data.

Photo by Tada Images via Shutterstock